Suspension of dealing in TM home investor fund and TM home investor feeder fund.
Over the past few days all regulated property valuers informed fund managers that a “Material Valuation Uncertainty” clause would be included in their next valuations. The disclosure of their intent to include this clause subsequently results in Depositaries and ACDs suspending dealing in property funds. Unfortunately, we are no exception to this rule.
This is the first time since inception in 2012 that the TM home investor fund has suspended, and is not linked to the fund’s performance, nor to its liquidity which stands at just over 15%.
This clause is all-encompassing and does not differentiate between types of property asset classes, such as commercial and residential property. Properties in the TM home investor fund are 94% occupied. Excluding recent acquisitions in the Midlands the rate is at 99%. Alongside our property management partner firm, we are working hard to ensure “business as usual” for our tenants, many of which are key workers, over this testing period.
More broadly, we are following closely the monetary and fiscal response to Covid-19. Things are moving very quickly, and we are aware some landlords have already received letters from their lenders offering mortgage repayment holidays. Supporting action for renters is also under way, as well as a whole raft of other supportive action by the BoE and the government. As such, we expect the UK residential property market to demonstrate resilience over the coming months, as it has over the past weeks and months.
We are monitoring the situation and any changes closely, including the trajectory of the virus and economic situation in China which should give us indications of the lengths of the outbreak. Throughout this period, we are working in close collaboration with our valuers, Depositary and ACD.
It is also worth pointing out that the UK housing market is in better shape than in 2007/08. Interest rates are low, mortgage lenders have been more prudent over the past decade, the housing market is less leveraged than 12-15 years ago and although jobs are threatened by the current crisis, employment is at record highs.
Please click here to read the official communication regarding the suspension of dealing.
The Q & A document regarding the suspension can be downloaded here.
Updates regarding the Fund’s suspension and other relevant information will be posted below.
2nd April 2020: Please read the March valuation update for the latest information on the Fund’s property valuation and our outlook for the UK housing market.
2nd April 2020: A full list of the Fund’s property portfolio and cash/liquid holdings is available in the Portfolio Summary sheet.
Hearthstone Investments PLC is the parent company of the Hearthstone Investments Group. Regulated business is carried out by Hearthstone Asset Management Limited. Hearthstone Asset Management Limited is an appointed representative of Thesis Asset Management Limited which is authorised and regulated by the Financial Conduct Authority (114354). Hearthstone Investments PLC (06379066) and Hearthstone Asset Management Limited (07458920) are both registered in England and Wales. The registered office for both companies is c/o Waterstone Company Secretaries Ltd Third Floor, 5 St. Bride Street, London, United Kingdom, EC4A 4AS.
Thesis Unit Trust Management Limited is the Authorised Corporate Director of the TM home investor fund. Authorised and regulated by the Financial Conduct Authority (186882).